Case study: Rus Build joint venture

Résumé du document

The Rus Build case talks about a joint venture created in 1989 between an American and Russian company. The US Company is Fredericks Construction, Inc led by john Fredericks and Gribov Engineering Institute is the URSS Company.

Before getting into details let's remind briefly what a joint venture is. According to investwords.com website it's "A contractual agreement joining together two or more parties for the purpose of executing a particular business undertaking. All parties agree to share in the profits and losses of the enterprise".

So, the US Company was looking for partner to start a new business in the USSR, a professor at the institute heard of that and decided to set a meeting with M. Frederick to see what they could do together. They found an agreement and define 3 lines of business:

-Marketing of products in the construction industry
-Management of large-scale construction projects
-Design & delivery of management training programs

Extraits

[...] What recommendation could we make now that we know that USA and USSR have very two different culture? Pothukuchi et al. (2002) tell us that when two companies action and practice are too different, then it could lead to incompatible organizational culture. It means that both partners will need more time and resources trying to develop common management practices and tactics. We can say that the difference in corporate and national culture is very important in the management of JV. [...]

[...] For example cultural training can teach the and don't” which represent the major things that you should or not do in a foreign culture. The board members needed to be aware of that. The other Issue I mention was that the JV involved too much unrelated business. Instead of easing out Fredericks, the Russians members should have try to re install the dialogue. They should have talk to him to solve the conflict. We could ask ourselves, was this JV a good idea. [...]

[...] Before getting into details let's remind briefly what a joint venture is. According to investwords.com website it's contractual agreement joining together two or more parties for the purpose of executing a particular business undertaking. All parties agree to share in the profits and losses of the enterprise”. So, the US Company was looking for partner to start a new business in the USSR, a professor at the institute heard of that and decided to set a meeting with M. Frederick to see what they could do together. [...]

[...] So the context of this joint venture is very important and has to do with the success of this JV. We could of course expect some issue considering the two very different view of doing business and the past of conflicts (post cold war context) Identify the key challenges and problems that are described in the case. I will here highlights the main difficulties faced by the two parties. Hiring qualified Staff The members of the board of directors had great technical experience in their field and to manage big construction project but they lack experience in entrepreneurship and international business mostly because of the cold war. [...]

[...] It's more tangible because organizational culture is the set of values, vision and strategy that is implemented within the organization. So, if two companies have two different organizational cultures, it could be hard to work together and even lead to failure. Actually (Almeida et al. 2002) tell us that of the main reasons for the failure of alliances is due to the incompatibility between corporate cultures of the partners”. We could assume that the US and USSR part had very different culture. [...]